Tag Archives: buying construction equipment

Just because the economy has opened up, it has led to doing business without much restriction all over the world. The world has shrunk to a larger extent when it comes to doing business internationally. This means a person located in Singapore can easily manage his daily business affairs that he has spread across several countries. Many small time businesses who were not able to grow in the domestic market suddenly became successful as they were allowed to trade overseas. The businesses that did not have many takers in the domestic market were able to benefit a lot once the overseas doors were open to them. Heavy equipment manufacturing companies that were founded in America have now spread their wings in many countries and are operating from there. So let’s say if you need a specific machine that is perhaps not manufactured in the US, it gets shipped from some other country and the order is met.

The reason why many heavy equipment companies have switched their manufacturing units from US to other countries is they get cheap labor and cheap facility as compared to US. Since they get everything so cheap and yet come out with supreme quality product is one of the prime reasons why they have moved their offices to other countries. It does not certainly means that they do not have any manufacturing units left in US. It is just that they are hedging their profits by having separate units all over the world. Other than that, they can also meet the demand of the construction industry of the country they are currently located in without having to spend more money in shipping the item from some other country. One more reason why it makes sense to produce heavy equipment in a country having cheap labor and ship it to US is the end product will cost far lesser than what it would have been if it was produced in the US.

Import and export restriction needs to be analyzed:-

Every country has some restrictions on the import and export of materials and so does US. All you need to do before you place an order outside US is contact the customs and inform them of the heavy equipment that you want to import. Check the restrictions that they have and what you can do to clear them by following the law of the land. The cleaning the quarantine department may pose some kind of problem to you as they will not want foreign germs and bacteria that is usually found in the soil and remains stuck to the tires of the machine. They might ask you to come along with certified heavy equipment cleaner who will clean the stuff and then you can take the machine.

Update yourself on taxes and duties:-

When you order heavy equipment from overseas, you are liable to pay certain tax and duties on the item. You need to update yourself on those duties. Get in touch with a professional customs dealer who will inform you about it and you can be prepared for your next move.

Doing a business, one has to play with infinite risks. Because in every risk there lies opportunities and one needs to see those opportunities before they see the risk. No wonder one should also analyze the risk involved but that does not mean that he should avert from taking risk and forego those chances. Averting risk will also lead to losing of those opportunities that comes by it. Therefore it is said that one who takes more risk has more chances to earn but he should be careful enough to understand his risk appetite and that if he could sustain after taking that risk.

As far as the construction business is concerned, one needs to take special care when it comes to gaining momentum. At times he will be flooded with work but he should be careful to choose them keeping into consideration his ability to complete them on time and also the kind of heavy equipment he has in hand. Construction business will give you enormous opportunities to make money but it does not take much time for the tide to change. You won’t be able to figure out when the industry takes the beating and you start losing work. Well, this is the time when you will need the money that you have earned during the years to sustain your company. You can’t rely on your investors as they will also face the brunt of the market and will be short of money.

It is therefore very crucial that you keep a contingency fund while you are doing well in your business. Always keep on adding some money towards the corpus and make it look like a healthy sum so that the time you need the money you should not find it short of your needs. Another very common mistake that many owners of construction companies make is that they go on a buying spree. They keep on buying heavy equipment without even thinking if they would need it for any of their existing projects. Well, they are not aware of the possible danger that they may encounter. Any dip in the construction market will have a direct impact on their business and they will find it hard to keep it floating. Then they will begin with various cost cutting measures which was probably not required had they managed a contingency corpus.

Buy heavy equipment only when you see a pretty strong reason to back it or else it will turn out to be futile to go for such investments. It makes no sense to buy machines now at a higher price and then proceed with distress selling. So when the pasture is green for you, save as much as you can for days that might not be a comfortable one for the construction industry and buy heavy equipment only when you see a strong need for it. Analyze the situation well before you take a call. Do not fall prey to fancy gadgets and machines as you may not even need them in the first place.

We often find ourselves in a state of confusion when it comes to borrowing money to buy heavy equipment. We are somehow unable to decide if it will be at all the right decision to borrow money from a financial institution as they will charge higher rate of interest and it may take a toll to repay the loan. On top of that, we also have to see that we have sufficient money to run the business. One who undergoes this situation will definitely see this to be tricky because he intends to buy new machines but taking a loan for that is what keeps him confused.

There are few tips one should take into consideration before they think of buying heavy equipment by borrowing money.

Study your financial standing well before your think of any procurement:-

Knowing your finances well is very important before you go with the decision of procuring heavy equipment. If you see the need to purchase the machine is quite immediate and you do not have sufficient reserves to buy the stuffs and run the company at the same time then you should consider options like renting the machine or for buying used ones. This will ensure that you have the much required machines and also keep up with your work. You only have to pay the monthly rent if you take it on rent and return it once the contract expires. Simultaneously you can also strengthen your reserves so that you can at least afford to pay the down payment the next time you think of procuring the equipment.

Study the financial institutions that lend money for business at affordable rate of interest:-

It is crucial that you do a thorough study of financial institutions that are willing to lend money for business at affordable rate of interest. At times, banks come up with various schemes which do not run throughout the year. It is kind of one time offer where they lend money at attractively lower rate of interest. This is done to specially attract businessmen to borrow money from them. You only need to check if they have any hidden cost attached with the loan. Most banks offer money at lower interest rate but they also charge high closing costs which becomes quite problematic for the borrower as he feels cheated after the deal.

Repayment plan should be in place:-

Once you are done studying the loan scheme of the bank and have decided to borrow money from them, the next important step would be to form the repayment plan. You have to ensure that you keep the installment money aside from all the recurring as well as non-recurring business expenses. For that, place a strategy well in advance where you have a contingency or a back-up plan in place. If things go wrong you know you can still survive with the money you have kept in the contingency reserve.

If you have ever looked inside a construction site, you will come across various sorts of heavy equipment. Machines of all sizes and use are available and all seems to be brand new. Construction companies take immense care in maintaining their machines to keep them looking new. They also believe in investing their money in buying new equipment rather than buying it second hand. The new machine cost them thousands of dollars but it also ensures that the user gets all that he wants from the machine. Be it efficiency, accuracy, performance and low fuel consumption, they may get it all in that machine and therefore they often sell off the machine that gets old in the system. As far as the big construction houses are concerned, they can be better off with buying new equipment; however there are companies which struggle to keep their business running. They may not afford to buy new equipment whenever they desire to buy one.

For new businesses it is prudent to use used equipment rather than blocking their finances in buying new machines. Before they buy old equipment, they need to check if the machine is in proper order. Only when they are content with the quality of the machine and are sure that the equipment will deliver when it needs to they should go ahead with the deal.

It has been that many small construction companies who struggle with their businesses put away the idea of buying new machines and hunt for sellers wanting to sell their old equipments. The reason it is better to invest money for a new construction company in old machines rather than buying new ones is that they do not get marked down in the most important component of their business and that is taking care of their finances. Buying used machines helps them in saving a good chunk of money for future business requirements. Newbies experience lot of financial hardships in their initial phase and those who successfully make the right decision survive. It becomes extremely important for new businesses to understand their requirements and their limitations and do not get carried away by the likes of big construction houses.

Another challenge that often comes across new businesses is getting their loans sanctioned. They find it extremely difficult to get their loan approved by financial institutions especially when the loan amount is high. Therefore, if they decide to buy new equipment, getting the loan for it will be very difficult. However, buying used equipment will not become a huge debt on them and they may find institutions that will provide them with the loan amount.

It is not difficult to find sellers in the market. A buyer can make use of platforms like online sites that specifically deal in selling used heavy equipment. Buyers can check such sites and can expect to get a real good bargain there.

If you are a person who likes to do some research before deciding to buy a product, then you are moving on the right track in becoming a wise buyer. Not many give an intense research before buying an item and trust that the salesman tells them. If you go by the words of the salesman and then buy the product you end up with 2 possibilities. Either you get a good product that you will cherish using it or you will get something that is not worth your money. Eventually, you will lose some money in that transaction. Imagine the same situation when you are buying an expensive bulldozer. You just go by the words of the salesman and buy it. You later understand that you actually wanted some other features with some other benefits and now you don’t have much option.

We would be stressing upon few points that you must do before you buy a bulldozer.

Know your requirement and conduct an extensive research on the product:-

It is very important to understand what you are actually looking for in a bulldozer. Today, heavy equipment manufacturing companies have come down with “n” number of models having various features and every additional feature will cost you more. Therefore, it becomes extremely crucial for you to first know your requirements before you even start your research work. If you have a mighty project in hand then the set of requirements will be different but if the project is small then you may need an altogether different set of machine. Once you have known your business need, the next step is to do some research on the machine. As stated, bulldozers are manufactured by various companies and they come up with different models. So you need to study the kind of model you may need for completing the project.

Allocate funds for the purchase:-

While you are on with your research, you should also keep in mind another important aspect which is the amount you can allocate for the purchase. Check if you have enough funds to pay upfront or you want to pay via easy installments at the beginning of every month. Only when you are completely convinced that your finances are in order and you won’t have any trouble financially after purchasing the dozer, you should go ahead with the purchase.

Renting a dozer or purchasing a used one:-

Just in case, you find the amount way high and can overtly pinch your pocket, you might even want to take the option of either taking the dozer on rent or buy a used one. A used dozer will comparatively cost lesser and he may evade from feeling the heat.

Medium and small dozer are equally effective:-

If you are of the opinion that big machines are more effective then it is time to change your thought. It has been seen that in most cases a medium/small sized dozer has been more effective than a large sized machine. So considering the kind of project and the site, you should be looking for a dozer that suits your needs.

Construction industry falls in that category of industries that has huge requirement of finances for some reason or the other. They need money to take care of the operating and non-operating expenses, pay the workers their wages etc. They also have to check on the kind of heavy equipment available with them so that in case there is a need to get a new machine they should have the funds to go and get it. Heavy equipment are quite an expensive stuff and one got to be ready in advance and keep the funds available to ensure that the need of the business is fulfilled. Having said this, there is one point that the owner of a construction company can ponder. In case, if they can get the same machine that they are looking for on rent rather than having to buy them, it may save a lot of money of the company and simultaneously they can make use of the funds that were parked to buy the machines to take care of some other business needs.

There is however one very important point that you should keep into consideration before you rent a machine. Since you would be using somebody else’s equipment, you should ensure that the machine has all the features that you would be requiring for the project and the machine is in good shape. You should probably take an expert with you who will examine the machine before go ahead with the deal. You should not end up taking equipment for which you have to repent in the future.

Few other pointers that you should know before you sign on the dotted line.

A brief history of the machine:-

To know a few things about the machine will always be beneficial as it will help you to negotiate with the giver. For instance, if the machine has some cases of accidents then it puts you in a position from where you can demand for a deduction in the rentals. Negotiations like these are always open and the taker must be ready to take chances wherever and whenever it is applicable. Knowing the history of the machine will also give you the idea of how old the machine is and is it at par with the construction equipment that comes with the latest technology gadgets. This will help you to decide if you should be eventually going for the deal as it makes no point in renting something that is technologically backward.

Knowing the tentative duration of the project:-

You should at least be aware of how soon you can complete the project. On the basis of that, you would be renting the stuff. Always rent the machine for an additional 2 months from the tentative date of completion. You never know if things may get delayed and you have to prolong the use of the equipment. Often the giver rents the machine keeping into consideration that he may not need the machine for a specific time and if he rents it to you he may ask you to hand it over once the terms completes. So if the work is left incomplete and he asks you for the machine, you will be left in a murkier situation. To avoid this, you should rent it for 2 extra months and keep things in your control.

It may not be always possible for people to go to the showroom of heavy equipment manufacturing companies to order heavy equipment. The problems that people may encounter are the showroom is far away from their place. Shipping the item could be an issue as shipment is not available in their location. These kinds of logistic issues will always play a role because you may not be able to buy the equipment directly from the manufacturing companies. At times, you may not find their shops available in your city. So you have to compromise by buying the equipment of some other company that you may have never wished to buy. Some people are loyal to one particular brand and they will only buy equipment from that brand. It becomes difficult for such people to get their items at a place where the manufacturing companies do not have any shipment facility.

To avoid a situation like this, it is recommended to buy the machines online. Now the question is, is it reliable and safe to buy heavy equipment online? Well, it is as reliable and safe as buying it from a person you hardly know anything about. It is true that you do not know about the seller nor you know anything about the machine as you are unable to see the machine live in front of you. Nevertheless, the seller makes the necessary description of the machine that the buyer is required to know so that there is no ambiguity left in the minds of the prospects. The seller can state everything that he knows about the machine in the listing for the buyer to make an informed decision and in any case if the buyer feels cheated, he can move to the grievance department and can claim his money.

In order to buy heavy equipment online, the first step is to register with the site. Fill in details like your personal information and your credit card details with them and create your User ID and password. Once you have created your account, you can state the name of the item in the search bar and start hunting for the item. You may see several sellers having listed their items with the price tag on it. You have to click on the item to see the description and its features. After you’re done reading the description and it fits your taste, you can try to establish contact with the seller or can directly click on “Buy Now” option. You can make the payments as prescribed in the site and an email confirmation will reach the seller. It is recommended that you try to contact the seller before buying the item. It is sensible to check the machine by operating it and know everything is in working condition. You may also take an experienced person with you who can give you input about the quality of the machine.

Once you’re content with the item you’re buying, check the available shipping options and get it shipped to your place.